Posts tagged “Economics”

Forever has to end sometime and it (not forever but the book) had sat on my floor forever. My fingers would from time to time flick through its pages, eyes scanning the words, heart quickening at the one-sure-day prospect of starting this new book. I do this often to all the unread books on my weary floor or at least to the ones that I can reach easy. Today I finally came round to reading John Steinbeck’s “The Grapes of Wrath”; its turn had come; the bell had tolled; its number had come up. Ah, but first the painful thirty pages of Introduction. Who writes these long pro-prologues?

I always read Introductions because from experience they add context that’s more often than not inestimable. For Steinbeck’s book I was moved by the background accounts of dust bowl 1930s California; starving migrants on the quest for a home, to “eat what they raise, use what they produce … and share in the works of their hands and their heads.” The feudal landlords who ran California would hear none of this. Despite the Federal Government’s efforts to provide humane living conditions for the migrants, conservatives in Congress worked to wreck the Government’s plan by slashing the budget (sound familiar?). It’s a sure bet these conservatives were all church-going christians. Helping the poor is just not the American way.

“There are about five thousand families starving to death …, not just hungry but actually starving. The government is trying to feed them and get medical attention to them with the fascist group of utilities and banks and huge growers sabotaging the thing all along the line.” – from a letter Steinbeck wrote to his agent, Elizabeth Otis.

I’m reminded of the famous Gracchi brothers, Tiberius and Gaius; social reformers in Rome almost a century before the great Julius, that dictator for life who has come to define the Roman epoch. The famous brothers planned land reforms to tackle the plight of the peasants who worked the lands of the rich landowners. Not surprisingly these plans were stoutly opposed. In the end both brothers were assassinated by their political opponents and by vested interests. But the thread they unravelled wound its infernal way down the ages until Augustus wound the last metre around the throat of the established order and snuffed out the Republic. After that, the vested interests (that is, those who hadn’t been killed off) adjusted to the new regime of Empire and the poor continued being destitute. Jesus said we will always have the poor (Mark 14:7) and he was damn right. But does he have to be right forever and ever?

After Steinbeck’s book came out the conservative Right went into overdrive. They called the book “communist”, “immoral”, “warped”, “a lie, a black, infernal creation of a twisted, distorted mind.” And there’s the tactic of calling a hated work “an embodiment of Marxist Soviet propaganda.” [Admittedly, this coming in the shadow of Stalin’s show trials must have been particularly damning]. Even in a democracy standing up to entrenched power is often a dangerous adventure.

Rachel Maddow on the Republican long, long plan to shut down the US government:

Bad, bad, bad, that is, when practiced the U.S Republican way: grandstanding, intransigent, self-defeating, hyperbolic and pure nuts. Boy, it’s going to be nigh impossible for the U.S to preach democracy to the un-democratized in the future; and maybe that’s a good thing. Physician, heal thyself. If the “richest and most powerful nation in the history of mankind” (as we are often hectored) with its unparalleled resources, history, tradition and education cannot produce a functioning democracy what chance for functioning countries run by strongmen? Better the strongmen stay in power or so the argument will go. Now I don’t know if I’m with the sceptics that the U.S is fast turning into a banana republic because even bananas have skins. Republicans are meanwhile peeling off the skin of democracy that keeps the demos inside intact and mashing the country to mush.

According to the US Bureau of Labor Statistics there were approx 118 million full-time employees in the US in August (http://www.statista.com/statistics/192361/unadjusted-monthly-number-of-full-time-employees-in-the-us/). Just under one million of them are going to be summarily dismissed at midnight tonight by the Republican House of Congress. The largest mass firing since Lehman? Republicans probably think this is all a joke. “Just give us what we want,’ they whine with an air of entitlement, “and we won’t let the country go up in smoke.” A party of adults who think no deeper than a three-year old.

Democracy isn’t a perfect institution but a stop-gap measure to avert civil war: rational intelligent people agree to disagree; and agree to live by laws instituted by democratically elected governments. If one party doesn’t like the law it canvasses the public and if successful, gets elected and changes the law. Otherwise it abides by the law of the land. It is that simple but it takes maturity to abide by it. This is a concept that the founding fathers of America understood pretty well. It is a concept that the bigwigs in the Roman Republic let wither after 400 years of republicanism. It is a concept that the inferior intellects of today’s US Republican party have chucked out the window. After all they are God’s party and God doesn’t compromise, right? “It’s my [God’s] way or the Hell way.” It was hell’s way for Rome – democrats and republicans alike were slaughtered in the ensuing melee and the State exchanged independence for submission under emperors.

The knock-on effect of a million people being without a paycheck will be felt much farther than the eight hundred thousand being dismissed. Household budgets, care for children, consumer spending, impact on capital markets etc etc all these are understood by those with some modicum of financial nous and no doubt there will be inscrutable research papers and theses written. The rhino in the room is the precedence that this ill-thought and irresponsible misadventure by the Republicans sets: this will be a cancer that won’t stay in remission. And the rest of America must fear when sooner or later the Republican party fractures and implodes. It won’t be a day for celebration because without an overarching structure, the rank and file of idiots will be bereft of the hope of sound leadership. For history tells us that desperate people take desperate measures.

Jerry Brown: The 75yo guv’nor who’s reportedly taken California from deficit to surplus. “This idea you can have ice cream every night? Ice-cream was for your birthday” he says about his childhood. On his trying to get four state Republicans to back tax reform: “I tried. Almost on bended knee. Going to their house. It was almost like Camus’ theatre of the absurd. The heart yearns for meaning, and the universe is silent.” I love this guy but then I don’t live under his governorship.

I picked up Frederich Hayek’s book “The Road to Serfdom” from my stack with both excitement and trepidation. Excitement because this is one of the most famous books of the last century on political economy and trepidation because it is also a favourite of right-wing laissez-faire pundits. It didn’t take me long to start marking off objections which just confirmed my suspicions. And then at some point into the book I realised the author was not against government per se or for laissez-faire economics. Hayek was against the concentration of power, full stop; for having been through the rise of National Socialism (Nazism) he was taken aback by sympathetic views in Britain, his new country, on State organization of all affairs as was common in the Germany leading to the rise of Hitler. Of course, Hitler exploited this to devastating effect. In economics, Hayek was in favour of competition as the best way for directing economic affairs and guaranteeing individual liberties. He was firmly opposed to monopolies or oligopolies. In government as in business Hayek thought concentrated power will verily be abused per Lord Acton’s famous saying: “Power tends to corrupt, and absolute power corrupts absolutely.”

So what do I think of this book. It is immense and essential reading. It really is and I kept marking stuff all over the place. For all those capitalists on the left, as I am, who may be afraid of reading this book please toss that fear into the abyss. It’s a good thing to have a lot of perspective and this book will challenge your beliefs in a healthy way. I found myself re-examining my wholehearted support for the European Union in the form that it is in today and that was a good thing. One should keep growing in thought and ideas. I am not sure I agree as one reviewer suggests that this book is the most important book against totalitarianism since I can think of works by Hannah Arendt but this may well be the more readable.

“In [most] matters as in diplomacy, a nicely conformist nature, a good tailor and the ability to articulate the currently fashionable cliche have usually been better for personal success than an excessively inquiring mind”.

Adapted from the book: Money: Whence It Came, Where It Went by John Kenneth Galbraith

This afterall is the conundrum facing most creative minds: do as they do and be loved or blaze your own path and love yourself. It’s the difference between being an employee and an entrepreneur. Remember though that most businesses fail so this conundrum could be the difference between food on the table for you and your children or food stamps and the soup kitchen. It is certainly the difference between playing office politics in a wild scramble for juicy assignments and/or the fulfillment that comes from doing what you love best and kicking ass while doing it. It’s not an easy decision. But shouldn’t it be?

I really could do with a Byron beef burger right now. Horseburger. Beef, horse, beef, horse, I mean beef burger! Lord knows what is packaged in our food in Britain anymore. The hunt for cheaper and cheaper things but higher and higher profits is driving regard for truth, integrity and quality to hell. It simply isn’t possible for everything to get cheaper while at the same time we all get richer and companies make even more profits. More profits can only arise if people spend more and/or prices rise and people will only spend more if they earn more (or get more in debt) but if prices rise then things are not getting cheaper and if people earn more then profits are constrained. Simple economics; without higher productivity, something has to give. Next we thought we were buying spring water but it was actually purified passed water. Of course, there is no public health risk for afterall it’s full of vitamins 🙂